Consumer demand will continue to grow

In 2020, my country has effectively contained the new crown pneumonia epidemic, the economy has recovered rapidly, and the trend of improvement is obvious. On February 24, Kristalina Georgieva, President of the International Monetary Fund, pointed out in her speech that China's economy will grow by 9.2% in 2021, an increase of 7 percentage points over 2020. Even according to the forecast made by the National Bureau of Statistics, my country's economic growth rate will be more than 5% in 2021, and the growth rate will be at least 3 percentage points higher than that in 2020. In 2021, important economic indicators such as my country's industrial added value and fixed asset investment will also speed up accordingly, laying a solid foundation for the steady growth of my country's steel demand.

The author predicts that in 2021, my country will continue to take infrastructure investment as an important tool for stable economic growth, and real estate investment will continue to maintain a relatively high growth rate. While the macroeconomic recovery is expected, the global manufacturing industry will also show a positive trend, and the speed of recovery will continue to accelerate. The author predicts that the world economy will change from a decline to an increase in 2021. The trend of global manufacturing is improving, which is a big benefit to the world's steel demand and the improvement of China's foreign demand environment, especially to the export of steel.

The external demand environment continues to be severe

Although some industry organizations predict that the global economy will rebound sharply in 2021, it can only recover to the level of 2019 before the epidemic. Moreover, the development trend of the epidemic this year is still uncertain. At present, the situation of the new crown pneumonia epidemic in the United States, the European Union, South America, India and other countries and regions is still severe. It is not ruled out that the foreign epidemic situation may still deteriorate.

As of 11:00 on March 1, the cumulative number of confirmed cases of new coronary pneumonia in the world has exceeded 114.6 million, and there are more than 1 million confirmed cases in 20 countries around the world. In addition to the United States, there are also India, Brazil, Russia, the United Kingdom, France, and Spain. , Italy, Turkey, Germany, Colombia, Argentina, Mexico, Poland, South Africa, Iran, Ukraine, Peru, Indonesia and the Czech Republic; the United States, Brazil, India, Mexico and the United Kingdom have 5 countries with cumulative deaths exceeding 100,000. At the same time, countries such as the United States may continue to suppress China's export trade this year.

Although the external demand environment of my country's steel in 2021 is not optimistic, the author predicts that this year my country's steel exports are likely to reverse the decline for many years and show a slight increase.

High-grade iron ore continues to have a supply gap

In 2021, both sides of my country's steel products supply and demand will make efforts simultaneously. Under the influence of stronger consumer demand and larger-scale steel production, the import volume of high-grade iron ore will remain high. In view of the low import volume of iron ore in my country in the past few years, a certain supply and demand gap has been created, which has caused a substantial increase in iron ore imports in the second half of 2020. The year-on-year growth rate of iron ore imports in individual months has reached two points. number. 

Despite this, the domestic demand for high-grade iron ore is still large, and it is estimated that the national iron ore imports in 2021 will not be less than 1.1 billion tons.

In 2020, the price of imported iron ore will increase significantly. In addition to the tight supply pattern, the depreciation of the U.S. dollar is also an important factor. Some experts predict that the U.S. dollar will depreciate by 30% in 2021. Due to the existence of factors such as the weakness of the US economy, the expansion of the fiscal deficit, the sharp rise of US debt, and the extremely loose monetary policy of the Federal Reserve, it is expected that the dollar will continue to depreciate this year. Affected by this, the price level of iron ore imports this year will continue to be affected by the depreciation of the dollar. In addition, if this year's epidemic spreads to big iron ore producing countries such as Brazil and India, it may bring uncertainty to the global iron ore supply side. It is not ruled out that iron ore prices may fluctuate drastically as a result. The author predicts that this year's iron ore prices will show a high level of volatility.

It is worth mentioning that since January 1 this year, my country has allowed domestic enterprises to import recycled steel raw materials to replace iron ore, which will help to a certain extent restrain the increase in iron ore prices. According to statistics, a total of 6 orders for the import of recycled steel raw materials have been signed, and there have been 3 orders, namely, Ouyeel’s 3,000 tons of recycled steel raw materials imported from Japan, Zhejiang Judong’s 2,800 tons of recycled steel raw materials imported from Japan, Guangzhou Guangzhou A batch of recycled steel raw materials imported from Macao, China, passed the customs inspection on January 29, February 4, and February 5 respectively.